Australian bond futures prices have rallied on the back of surprisingly soft Chinese manufacturing data.
The HSBC purchasing managers' index on Thursday showed Chinese manufacturing activity fell to a six-month low in January, with a reading of 49.6, down from December's 50.5.
The figure was weaker than expected and dipped below the 50 level which separates expansion from contraction.
"US Treasuries rallied sharply overnight. Yields drifted lower in the first half of the session following yesterday's disappointing China PMI manufacturing data," ANZ economists said.
"Australian bond futures rallied strongly across the curve, outperforming US Treasuries."
At 0830 AEDT on Friday, the March 2014 10-year bond futures contract was trading at 95.980 (implying a yield of 4.020 per cent), up from 95.880 (4.120 per cent) on Thursday.
The March 2014 three-year bond futures contract was at 97.090 (2.910 per cent), up from 97.000 (3.000 per cent).